How to close out 2006? How about a post about trade? [Yeah, because you never write about that!!--ed.]:

1) In the lastest issue of Foreign Affairs, Rawi Abdelal and Adam Segal suggest that the tide has turned for globalization:

Has the current age of globalization already started to come to a close? Will the process of integration continue, or will it grind to a halt?

The paradoxical answer is neither of these scenarios. The technological revolution that has driven the current wave of globalization will continue. Communication will become still cheaper and easier, allowing corporations to spread their operations -- research and development, design, and manufacturing -- around the planet. Companies will exploit scientific talent in other countries to spark a new wave of technological innovation.

At the same time, certain barriers will start to rise. The institutional foundations of globalization -- such as the rules that oblige governments to keep their markets open and the domestic and international politics that allow policymakers to liberalize their economies -- have weakened considerably in the past few years. Politicians and their constituents in the United States, Europe, and China have grown increasingly nervous about letting capital, goods, and people move freely across their borders. And energy -- the most globalized of products -- has once more become the object of intense resource nationalism, as governments in resource-rich countries assert greater control and ownership over those assets.

2) One step forward, one step back on U.S. trade policy. Stepping forward, Cato's Dan Ikenson rejoices in a mundane, yet positive change in how the Commerce department calculates anti-dumping rates. If the policy change takes place, it would be a welcome falsification of Daniel Kono's powerful hypothesis about how democracies obfuscate their protectionist policies (see also: "hypocritical liberalization").

Stepping back, the Detroit News' Gordon Trowbridge reports on the Labor Department's willful negligence in implementing the Trade Adjustment Assistance program:

[I]n a series of sometimes harshly worded opinions, the federal court that hears appeals of application decisions has criticized the Labor Department's administration of the program, accusing officials of shoddy investigations and blatant misreading of the law.

"This is no longer people criticizing the Department of Labor for one or two cases. This is a systemwide problem," said Howard Rosen, a former congressional staffer who now heads an organization calling for changes in the trade adjustment program.

3) Greg Mankiw cues me to a Washington Post op-ed by Senator Byron Dorgan and Senator-elect Sherrod Brown, "How Free Trade Hurts", in which a.... well, let's call it imaginative economic and historical analysis is put forward. Here's an excerpt:

At the turn of the 20th century, child labor was common; working conditions were often abysmal; there were no enforced workplace health, safety or environmental requirements; no unemployment insurance; and no workers' compensation. Workers were attacked and killed for the sole reason that they wanted to form a union; there was no 40-hour week, minimum wage, job security, overtime pay or virtually any other limit on the exploitation of employees.

America was split dramatically between the haves and have-nots. It was a harsh work world for many: nasty, brutish and, too often, short.

Worker activism, new laws and court decisions changed all that during the past century....

The new mobility of capital and technology, coupled with the revolution in information technology, makes production of goods possible throughout much of the world. But much of the world at the beginning of the 21st century looks a lot like the United States did 100 years ago: Workers are grossly underpaid, exploited and abused, and they have virtually no rights. Many, including children, work 10, 12, 14 hours a day, six or seven days a week, for only a few dollars a day.

The result has been a global race to the bottom as corporations troll the world for the cheapest labor, the fewest health, safety and environmental regulations, and the governments most unfriendly to labor rights. U.S. trade agreements paved the way for this race: While rejecting protections for workers or the environment, they protected investors and corporate interests....

We must insist that all trade agreements have labor, environmental and other protections so that American workers can compete on a level playing field. Trade agreements must also be reciprocal. The American market is the most desirable in the world. Every country wants access to it. That gives us a great deal of leverage, if only we'd use it. Barriers to U.S. products overseas should not be tolerated.

Free-trade agreements have protected drug companies, international investors and Hollywood films, yet failed to protect our communities, our workers and our environment.

We believe there is a better way. Fair trade is not the enemy of more trade. It's how we expand international trade without reversing U.S. economic progress.

Mankiw addresses the historical questions, and a lot of other free trade bloggers pick at the remaining carrion.

I've written previously about the dubious nature of the race to the bottom hypothesis. Indeed, I had updated and extended these arguments in the first draft of All Politics Is Global. Ironically, this section got cut from the final manuscript -- because the academic consensus is that the race to the bottom is so easy to refute, there was no point in devoting half a chapter to it.

After reading Brown and Dorgan's op-ed, however, this chapter fragment seems worth resuscitating. So, for those people who still really, really believe that globalization leads to a race to the bottom -- click here. And for those Congressmen reading this -- go click over to this Greg Mankiw post and make the recommended resolutions.

I'm back from vacation, I'm rested, and I'm ready to wade into a two-week-old blogosphere debate about whether libertarians are cultists.

Earlier this month grand conservative blogress diva Ann Althouse posted her thoughts about attending a Liberty Fund conference devoted to Frank S. Meyer's fusionism. I think it's safe to say that the conference scared the crap out of her:

I am struck -- you may think it is absurd for me to be suddenly struck by this -- but I am struck by how deeply and seriously libertarians and conservatives believe in their ideas. I'm used to the way lefties and liberals take themselves seriously and how deeply they believe. Me, I find true believers strange and -- if they have power -- frightening. And my first reaction is to doubt that they really do truly believe.

One of the reasons 9/11 had such a big impact on me is that it was such a profound demonstration of the fact that these people are serious. They really believe.

I need to be more vigilant.

I will say here I find this — to put it in as civil terms as I can — odd. I would note that Ann really believes some things too. Moreover, so do those people in Madison, Wisconsin — which is, I might add without fear of contradiction, far from an oasis of empiricism, realism and philosophical skepticism. But more importantly, the notion that stong conviction — AKA belief — is scary in and of itself can be the source of as much pain and illiberalism as certitude itself. Indeed, it is itself a kind of certitude I find particularly unredeeming.

Over at Hit & Run, Ron Bailey provides a great amount of detail about Althouse's behavior at the conference itself (hat tip: Virginia Postrel). It sounds very.... diva-like. Bailey's conclusion: "I sure hope that Ann Althouse's behavior at the Liberty Fund colloquium is not example how 'intellectual discourse' is conducted in her law school classes in Madison, Wisconsin." Althouse has a lengthy fisking of Bailey's post here. [UPDATE: Goldberg posts his reaction here. Back at Hit & Run, Radley Balko weighs in as well. And for the liberal take on the whole shebang, check out the bloggingheads diavlog between Marc Schmitt and Jonathan Chait.]

Also weighing in are Stephen Bainbridge (who shares Althouse's leeriness of libertarian ideologues) and Elephants & Donkeys (who does not share Althouse's concerns)

Go read everything. Having attended a few Liberty Fund conferences myself, I'd offer the following thoughts:

1) Liberty Fund conferences attract idea geeks -- people who will stay up until 2:00 AM debating the merits and demerits of different ideas. That's kind of the point of these things.

2) I've never encountered any racist attitudes, ideas, or even the benign neglect of these attitudes at these conferences.

3) At these conferences I have, on occasion, encountered a personality type that I suspect gave Althouse the willies -- people so besotted with the positive appeal of an abstract idea that they will argue in its defense against any and all comers. Indeed, they consider this a pleasurable activity. The worst of these lot will pooh-pooh valid counterarguments or appeals to pragmatism as besides the Big Point they are trying to make. Let's call these people True Believers.

4) Give that these are Liberty Fund conferences, I would wager that libertarians comprise a high percentage of True Believers at these functions compared to other ideologies.

5) Despite point (4), True Believers make up a very small minority of overall Liberty Fund attendees. Indeed, with the acknowledgment that modern liberals are probably the least represented group at these functions, the intellectual and professional diversity of these conferences is pretty broad.

6) I'm enough of an idea geek that I'm usually glad that one or two True Believers are in attendance, because it forces me to keep my arguments sharp in a Millian sense of debate.

7) The overwhelmingly predominant personality type in attendance at these functions are Contrarians. Which, of course, makes consensus pretty much a logical impossibility.

Idea geeks. Okay. Well, my experience in legal academia is that people who try to get into the idea geek zone need to get their pretensions punctured right away. The sharp lawprof types I admire always see a veneer on top of something more important, and our instinct is to peel it off. What is your love of this idea really about? That's our method.

We are here to harsh your geek zone mellow.

All well and good. But my experience in political science -- particularly international relations -- is that a distressingly high percentage of legal academics write from such an atheoretical, normative perspective that they don't realize that underlying their legal and policy pragmatics are implicit theories that need to be exposed, prodded, probed, and (often) pierced. I might add that it is my fervent hope that legal academics keep on doing this, because it means that they will continue to provide empirical grist for my theoretical mill.

That said, the book on my nightstand right now is Adrian Vermeule and Eric Posner's Terror in the Balance: Security, Liberty, and the Courts -- and they have their own issues with civil libertarians. So I'll humbly exit this debate and go do some more idea geeking reading.

FINAL UPDATE: Jacob Levy gets the last, definitive word on the subject.

ANOTHER FINAL UPDATE... I'M NOT KIDDING THIS TIME... THIS IS LIKE THE DOUBLE-SECRET, TRIPLE-DOG-DARE FINAL UPDATE: And I am telling you Ann Althouse is not going anywhere until she has the final word.

So that's it. I'm just going to back away slowly from the keyboard now... no sudden moves... no metaphors... no prose stylings that Althouse could interpret as sexual imagery in any way whatsoever.... and, yes, I did it!! [Heh. You said "did it."--ed. D'Oh!!]

Over the next 48 hours I will be on a mini-vacation, at an attractive metropolitan locale, with my wife.... and without the children.

None of you will be coming along either.

Talk amongst yourselves, and enjoy the break.

Here's an opening question: does this Economic Policy Institute paper accurately assess American attitudes about the global economy?

Merry Christmas! In certain parts of the globe, that whole peace-on-earth-goodwill-towards-men business seems to be at a low ebb.

On its front page, the New York Times reports on two civil wars that: A) involve the United States directly or indirectly; and B) are also drawing in neighboring countries.

First, there's the obvious one -- Iraq. James Glanz and Sabrina Tavernise explain that some Iranians have had their hand caught in the cookie jar:

The American military is holding at least four Iranians in Iraq, including men the Bush administration called senior military officials, who were seized in a pair of raids late last week aimed at people suspected of conducting attacks on Iraqi security forces, according to senior Iraqi and American officials in Baghdad and Washington.

The Bush administration made no public announcement of the politically delicate seizure of the Iranians, though in response to specific questions the White House confirmed Sunday that the Iranians were in custody.

Gordon D. Johndroe, the spokesman for the National Security Council, said two Iranian diplomats were among those initially detained in the raids. The two had papers showing that they were accredited to work in Iraq, and he said they were turned over to the Iraqi authorities and released. He confirmed that a group of other Iranians, including the military officials, remained in custody while an investigation continued, and he said, “We continue to work with the government of Iraq on the status of the detainees.”

It was unclear what kind of evidence American officials possessed that the Iranians were planning attacks, and the officials would not identify those being held. One official said that “a lot of material” was seized in the raid, but would not say if it included arms or documents that pointed to planning for attacks. Much of the material was still being examined, the official said.

Nonetheless, the two raids, in central Baghdad, have deeply upset Iraqi government officials, who have been making strenuous efforts to engage Iran on matters of security. At least two of the Iranians were in this country on an invitation extended by Iraq’s president, Jalal Talabani, during a visit to Tehran earlier this month. It was particularly awkward for the Iraqis that one of the raids took place in the Baghdad compound of Abdul Aziz al-Hakim, one of Iraq’s most powerful Shiite leaders, who traveled to Washington three weeks ago to meet President Bush....

American and Iraqi officials have long accused Iran of interfering in this country’s internal affairs, but have rarely produced evidence. The administration presented last week’s arrests as a potential confirmation of the link. Mr. Johndroe said, “We suspect this event validates our claims about Iranian meddling, but we want to finish our investigation of the detained Iranians before characterizing their activities.”

Ethiopia officially plunged into war with Somalia’s Islamist forces on Sunday, bombing targets inside Somalia and pushing ground troops deep into Somali territory in a major escalation that could turn Somalia’s internal crisis into a violent religious conflict that engulfs the entire Horn of Africa.

The coordinated assault was the first open admission by Ethiopia’s Christian-led government of its military operations inside Somalia, where — with tacit American support — it has been helping a weak interim government threatened by forces loyal to the Islamic clerics who control the longtime capital, Mogadishu, and much of the country.

Ethiopia’s prime minister, Meles Zenawi, said in a televised broadcast that he had ordered the action because he had no choice....

On Saturday, after several days of heavy internal fighting, Islamist leaders announced that Somalia was now open to Muslim fighters around the world who wanted to wage a holy war against Ethiopia, a country with a long Christian history, even though it is about half Muslim.

“What did you expect us to do?” said Zemedkun Tekle, a spokesman for Ethiopia’s information ministry. “Wait for them to attack our cities?”

Even before Ethiopia’s escalation on Sunday, there were alarming signs that the conflict in Somalia could quickly spiral out of control. According to United Nations officials, at least 2,000 soldiers from Eritrea, which recently waged war with Ethiopia, are fighting for the Islamists. They have been joined by a growing number of Muslim mercenaries from Yemen, Egypt, Syria and Libya who want to turn Somalia into the third front of holy war, after Iraq and Afghanistan....

American officials acknowledged that they tacitly supported Ethiopia’s approach because they felt it was the best way to check the growing power of the Islamists, whom American officials have accused of sheltering terrorists tied with Al Qaeda. A State Department spokesperson in Washington said Sunday that the United States was assessing reports of the surge in fighting in Somalia but provided no further comment.

I was dumbfounded by Sandy Berger's theft of classified documents when it was originally reported, but was "willing to believe that Berger did not have nefarious motives."

The latest round of reporting makes that second part impossible. From the Associated Press:

President Clinton's national security adviser removed classified documents from the National Archives, hid them under a construction trailer and later tried to find the trash collector to retrieve them, the agency's internal watchdog said Wednesday.

The report was issued more than a year after Sandy Berger pleaded guilty and received a criminal sentence for removing the documents.

Berger took the documents in the fall of 2003 while working to prepare himself and Clinton administration witnesses for testimony to the Sept. 11 commission. Berger was authorized as the Clinton administration's representative to make sure the commission got the correct classified materials....

Inspector General Paul Brachfeld reported that National Archives employees spotted Berger bending down and fiddling with something white around his ankles.

The employees did not feel at the time there was enough information to confront someone of Berger's stature, the report said.

Later, when Berger was confronted by Archives officials about the missing documents, he lied by saying he did not take them, the report said.

Brachfeld's report included an investigator's notes, taken during an interview with Berger. The notes dramatically described Berger's removal of documents during an Oct. 2, 2003, visit to the Archives.

Berger took a break to go outside without an escort while it was dark. He had taken four documents in his pockets.

"He headed toward a construction area. ... Mr. Berger looked up and down the street, up into the windows of the Archives and the DOJ (Department of Justice), and did not see anyone," the interview notes said.

He then slid the documents under a construction trailer, according to the inspector general. Berger acknowledged that he later retrieved the documents from the construction area and returned with them to his office.

"He was aware of the risk he was taking," the inspector general's notes said. Berger then returned to the Archives building without fearing the documents would slip out of his pockets or that staff would notice that his pockets were bulging.

The notes said Berger had not been aware that Archives staff had been tracking the documents he was provided because of earlier suspicions from previous visits that he was removing materials. Also, the employees had made copies of some documents.

In October 2003, the report said, an Archives official called Berger to discuss missing documents from his visit two days earlier. The investigator's notes said, "Mr. Berger panicked because he realized he was caught."

The notes said that Berger had "destroyed, cut into small pieces, three of the four documents. These were put in the trash."

Question to readers: will this new news cycle in any way affect Berger's current venture, Stonebridge International?

UPDATE: Pajamas Media has posted the Inspector General's report online.

Eszter Hargittai has tagged me with the "Five-Things-You-Didn't-Know-About-me" meme. So, here goes, in chronological order:

1) From the ages of eight to sixteen, I wore glasses before switching to contact lenses. Not a big deal, except that my glasses were housed in the most hideous-looking square peuter frames you could possibly imagine.

To this day my parents insist that those frames were "cute." After showing picture of myself from that era to many, many people, I have yet to find anyone who agrees with them.

2) In the seventh grade, I placed third in the Connecticut State Science Fair.

3) In the early eighties, my brother and I used to drive our mother crazy by our near-religious devotion to The A-Team. A few minutes before it would come on, we would loudly hum the theme song and then listen to Mom complain about the decline and fall of Western civilization.

4) As a grad student at Stanford, I had a thoroughly pleasant lunch with Jennifer Connelly. [Um, that's it?--ed. Alas, there's nothing else to report.]

5) A few years later, I was on a date with a woman who was not Jennifer Connelly. I found myself in the rare circumstance of being less interested in her than she was in me. Fortunately, the conversation turned to politics. At this point, I went out of my way to mention my membership in the Republican Party.

The date ended early.

The Washington Post wraps a series on federal farm subsidies with a story by Dan Morgan, Sarah Cohen and Gilbert M. Gaul on what happens when you mess with the trough. This part of the story goes back to 2001, and does something I would not have thought possible -- it makes me sympathize with Karl Rove:

One of the most remarkable examples of the farm lobby's power came in 2001 and 2002, when the existing farm bill was written, expanding payments again over the opposition of the White House and key lawmakers. Reformers see it as a cautionary tale.

The architect of the legislation was Rep. Larry Combest, an aggie through and through, a West Texas Republican who came from three generations of cotton farmers and who took control of the House Agriculture Committee in 1999.

Others on Combest's committee included a cattle rancher and tobacco farmer from Tennessee, a Missouri corn and hog farmer, and a government-subsidized rice farmer from Arkansas. The ranking Democrat, Charles W. Stenholm of Texas, had an ownership interest in cotton farms that got more than $300,000 in subsidies between 2001 and 2005, USDA records show.

With help from a generous mandate from the House Budget Committee -- chaired by Jim Nussle (R-Iowa) -- Combest produced a new farm bill in 2001 authorizing an eye-popping $50 billion, 10-year increase in price supports and income supports for farmers. He boasted that the measure was "a major step away from Freedom to Farm."

For one thing, the bill restored a key pillar of the pre-1996 program: cash payments that compensate for low crop prices. Thousands of farms were eligible even if they never grew crops. Budget officials estimated that change alone would cost $37 billion over a decade.

The Bush White House disliked Combest's bill. Chief political adviser Karl Rove saw it as the antithesis of fiscal responsibility. "We're Republicans," aides remember Rove grumbling. The White House budget office issued a stinging critique, saying the bill was too costly and failed to help farmers most in need.

Combest also faced strong opposition from a disgruntled group of Eastern and Midwestern lawmakers, and from senators who wanted tighter limits on what a farm could collect each year.

But Combest had a strong hand. "He hijacked the process," said a former USDA official who spoke on the condition of anonymity because he still deals with Congress.

At a meeting in Rove's office soon after the Sept. 11, 2001, attacks, Combest delivered a warning, according to several people with knowledge of the session. Unless the administration backed off, Combest warned, he and his farm-bloc allies would sink a top priority of President Bush's: legislation giving the president a free hand to negotiate a global trade treaty strongly favored by big corporations. "You have to ease up," one participant remembers Combest saying.

Over the next several months, the administration laid off its public criticism of Combest's farm bill. Combest withdrew his opposition to trade-promotion authority, and it squeaked through the House by a single vote. He declined to comment for this article.

Greg Mankiw explains.

I was on Hugh Hewitt's radio show on Tuesday evening to talk, ostensibly, about my Washington Post essay on grand strategy. We wound up talking about Iran mostly. You can read the transcript here. Hewitt is of the belief that the U.S. cannot afford even a small risk of someone like Ahmadinejad possessing nuclear weapons. I am of the belief that Ahmadinejad is not that as powerful inside Iran as Hewitt believes.

It's been a good week for my argument. First, there are election returns:

Opponents of Iran's ultra-conservative president won nationwide elections for local councils, final results confirmed Thursday, an embarrassing outcome for the hardline leader that could force him to change his anti-Western tone and focus more on problems at home.

Moderate conservatives critical of President Mahmoud Ahmadinejad won a majority of seats in last week's elections, followed by reformists who were suppressed by hard-liners two years ago.

The vote was widely seen as a sign of public discontent with Ahmadinejad's stances, which have fueled fights with the West and led Iran closer to U.N. sanctions....

The election does not directly effect Ahmadinejad's administration and is not expected to bring immediate policy changes. The local councils handle community matters in cities and towns across the country.

But it represented the first time the public has weighed in on Ahmadinejad's stormy presidency since he took office in June 2005. The results are expected to pressure him to change his populist anti-Western tone and focus more on Iran's high unemployment and economic problems at home.

Leading reformist Saeed Shariati said the results of the election was a "big no" to Ahmadinejad and his allies.

"People's vote means they don't support Ahmadinejad's policies and want change," Shariati, a leader of the Islamic Iran Participation Front, Iran's largest reformist party told The Associated Press on Thursday.

Similar anti-Ahmadinejad sentiment was visible in the final results of a parallel election held to select members of the Assembly of Experts, a conservative body of 86 senior clerics that monitors Iran's supreme leader and chooses his successor.

A big boost for moderates within the ruling Islamic establishment was visible in the large number of votes for former President Hashemi Rafsanjani, who lost to Ahmadinejad in the 2005 presidential election runoff.

Rafsanjani, who supports dialogue with the United States, received the most votes of any Tehran candidate to win re-election to the assembly. Also re-elected was Hasan Rowhani, Iran's former top nuclear negotiator whom Ahmadinejad repeatedly accused of making too many concessions to the Europeans.

The student movement, which planned the 1979 seizure of the American Embassy from the same university, Amir Kabir, is reawakening from its recent slumber and may even be spearheading a widespread resistance against Mr. Ahmadinejad. This time the catalysts were academic and personal freedom.

“It is not that simple to break up a president’s speech,” said Alireza Siassirad, a former student political organizer, explaining that an event of that magnitude takes meticulous planning. “I think what happened at Amir Kabir is a very important and a dangerous sign. Students are definitely becoming active again.”

The protest, punctuated by shouts of “Death to the dictator,” was the first widely publicized outcry against Mr. Ahmadinejad, one that was reflected Friday in local elections, where voters turned out in droves to vote for his opponents.

The students’ complaints largely mirrored public frustrations over the president’s crackdown on civil liberties, his blundering economic policies and his harsh oratory against the West, which they fear will isolate the country.

But the students had an additional and potent source of outrage: the president’s campaign to purge the universities of all vestiges of the reform movement of his predecessor, Mohammad Khatami....

[Babak] Zamanian, the head of public relations of the Islamic Association at Amir Kabir, said that while the situation had not been ideal in the Khatami years, Mr. Ahmadinejad’s antireformist campaign had led students to value their previous freedoms.

They were permitted to hold meetings and invite opposition figures to speak, he said, and could freely publish their journals. Now, he said, their papers are forbidden to print anything but reports from official news agencies.

The students also complain about the president’s failure to deliver economic growth and jobs. At last week’s protest, which coincided with a now infamous Holocaust conference held by the Foreign Ministry, students chanted, “Forget the Holocaust — do something for us.”

Iran’s oil minister on Wednesday admitted that Tehran was having trouble financing oil projects, in a rare acknowledgment of the economic cost of its nuclear dispute.

“Currently, overseas banks and financiers have decreased their co-operation,” Kazem Vaziri-Hamaneh told the oil ministry news agency, Shana.

The statement underlined the impact of de facto financial sanctions on the Organisation of the Petroleum Exporting Countries’ second biggest oil producer. As the controversy over Iran’s nuclear programme has escalated, the US has applied pressure on European banks and financial institutions to curb dealings with Tehran.

The fact that the UN Security Council could soon impose the first – even if mild – sanctions against Iran has compounded the political uncertainty and risks of doing business with Tehran. Iranian officials insist there is international interest in investing in Iran’s oil industry and European executives play down any impact on companies seeking deals in Iran....

“There’s a growing awareness that de facto sanctions are beginning to hurt and everyone understands the future of the economy depends on the development of oil and gas,” said a western diplomat. “Banks are not lending, partly because of US pressure, but the banks are also drawing their own conclusions.”

None of this means that Ahmadinejad will disappear tomorrow. It does mean, however, that the president of Iran will be worrying about more than being "insulted" by student protests.

If there were a contest for wackiest dictator in the world, many Vegas oddsmakers would have made Kim Jong Il the putative frontrunner. In truth, however, until today the hands-down winner would have been Turkmenistan president Saparmurat Niyazov:

He renamed the town of Krasnovodsk, on the Caspian Sea, Türkmenbaşy after himself, in addition to renaming several schools, airports and even a meteorite after himself and his immediate family. He even named the months, and days of the week after himself and his family. Niyazov's face appears on Manat banknotes and large portraits of the president hang all over the country, especially on major public buildings and avenues. Statues of himself and his mother are scattered all over Turkmenistan, including one in the middle of the Karakum Desert as well as a gold-plated statue atop Ashgabat's largest building, the Neutrality Arch, that rotates so it will always face into the sun and shine light onto the capital city. Niyazov commissioned a massive palace in Aşgabat commemorating his rule. He was given the hero of Turkmenistan award five times. "I'm personally against seeing my pictures and statues in the streets - but it's what the people want," Niyazov said.

He renamed the month of January after himself and April after his mother and banned ballet, gold teeth and recorded music. A planet of the Taurus constellation, a crater on the Moon and a mountain peak were other things named after him....

Like the khans who once ruled this long-nomadic land, Niyazov ran Turkmenistan from an office draped with carpets that made it look like a nomad's tent. When foreign leaders met him he often presented them with a horse.

Saparmurat Niyazov, the president of Turkmenistan, has died leaving the gas rich Central Asian republic he had ruled for over twenty years impoverished, internationally isolated and with no obvious successor.

Niyazov, known as Turkmenbashi, or Ruler of the Turkmens, died of cardiac arrest in the early hours of Thursday morning, according to a statement broadcast by Turkmenistan state television.

“The people of Turkmenistan will continue to pursue the political course of Saparmurat Turkmenbashi at this difficult moment”, the statement said.

Niyazov, who was appointed president for life by Turkmenistan’s Majlis, or parliament, in 1999, was 66 years old. He admitted earlier this year that he suffered from heart disease, but no successor was named.

Niyazov was a hardline dictator who established a bizarre personality cult in Turkmenistan, a largely desert republic bordering Afghanistan, Iran and Uzbekistan. The opposition has been brutally crushed and there is no independent media.

Western diplomats have expressed concern that frequent government purges ordered by Niyazov have denuded Turkmenistan’s administration of officials capable of ruling the republic or its industries.

Whether this translates into a few interesting weeks for global energy markets remains to be seen.

I received an e-mail today about the join Rudy website. This triggered a question that's been in the back of my head since I read Ryan Sager's The Elephant In The Room. Sager mentioned in the book that in a 2005 CPAC straw poll, Rudy Giuliani was the co-leader. Given CPAC is probably to the right of Guliani on every social issue known to man, this was a bit of a surprise. And somewhere in my brain I've been registering this kind of support for Giuliani in various straw polls.

So along comes this Washington Post story by Michael Powell and Chris Cillizza, saying, essentially, that Giuliani has no shot in hell of getting the GOP nomination:

His national poll numbers are a dream, he's a major box office draw on the Republican Party circuit, and he goes by the shorthand title "America's Mayor." All of which has former New York mayor Rudolph W. Giuliani convinced he just might become America's president in 2008.

He is showing the early signs of a serious candidacy: Giuliani's presidential exploratory committee throws its first major fundraiser in a hotel near Times Square on Tuesday evening, and he recently hired the political director of the Republican National Committee during 2006. A Washington Post-ABC News poll released last week found that Republicans give Giuliani an early lead over Sen. John McCain of Arizona, who is far ahead of the former mayor in organizing a national campaign.

Despite that lead, conservative party strategists and activists in key primary states are skeptical and warn that the socially liberal Republican faces a difficult campaign. They question whether a Republican who has had one marriage end in annulment and another in divorce, and favors abortion rights, gun control and immigrant rights, has much retail appeal in the evangelical and deeply conservative reaches of the GOP.

"If the Republican Party wants to send the social conservatives home for good, all they have to do is nominate Rudy Giuliani," said Rick Scarborough, a Southern Baptist minister and president of Vision America. "It's an insult to the pro-Christian agenda. . . . He's going to spend a lot of money finding he can't get out of the Republican primaries."

There is an advantage in doing scores of events for radio audiences and Republican activists over the past two years: At each of them I get to conduct my straw poll. In early 2005, I offered audiences the right to vote for one of five possible nominees --Senators Allen, Frist or McCain, Mayor Giuliani, or Governor Romney.

Two years ago, Senator Allen usually won, but Mayor Giuliani was occasionally on top of the poll --the older the audience, the better he did-- though usually he came in second.

By the dismal end of the 2006 campaign season --and I have only done one large event since the election-- Rudy always wins and Romney is always second, and it is usually close. Before he dropped out Senator Frist had close to zero support, and Senator McCain usually gets about 2%.

Or is it? Is the WaPo right and online commentators like Hewitt and Sager are wrong? The National Journal's Blogometer thinks it's the latter. But Glenn Reynolds notes:

I caught a bit of Hannity's show on XM today, and there seemed to be a lot of enthusiasm for Rudy Giuliani from conservative callers there. That's happened before. Maybe the larger GOP base isn't as socially conservative, at least in the context of the 2008 Presidential election, as people think.

Do any readers believe that Giuliani's popularity with the GOP base is anything other than an ephemeral phenomenon? Will they continue to support a man who endorsed Mario Cuomo for governor in 1994? If so, why?

UPDATE: Yes, I misspelled Giuliani's name in my original post. So sue me.

Note to self: if I ever instigate a coup in a Pacific Rim country, do not attempt to impose capital controls three months later:

Thailand was forced into an astonishing retreat from its controversial move to impose controls on equity investment by foreign investors after Bangkok shares suffered their steepest one-day plunge since 1990.

Just a day after introducing the controls, a rattled Thai government announced on Tuesday that it would exempt equities from the measures, although it would still maintain curbs for bonds and other debt instruments.

The sudden reverse followed crisis talks between the central bank, government and stock market officials after Thai shares tumbled by as much as 19 per cent at one point as shocked investors rushed to dump stocks. The sell-off forced the Bangkok Stock Exchange to impose its first suspension of trading before shares eventually closed down 15 per cent.

Other equity markets in the region fell in sympathy, providing investors with a catalyst to take profits after recent sharp gains. Mumbai fell by 2.5 per cent, Jakarta by 2.8 per cent and Singapore by 2.2 per cent.

However, foreign investors played down the prospect of contagion to other countries, saying the sell-off was driven by dismay over a move that was unlikely to be repeated elsewhere.

“The Thai authorities seem intent on committing financial hara-kiri,” said Christopher Wood, chief strategist at CLSA.

Mark Williams, manager of the F&C Pacific Growth Fund, said Tuesday’s share-price falls were overdone and that he expected a strong bounce on Wednesday.

But he said Thailand’s “macro mismanagement” would leave lasting damage on the country’s credibility with international investors.

The great Henry Paulson-led expedition to China ended a few days ago, and beyond the purchase of a few nuclear reactors, it's not clear that any policy movement took place. Indeed, the most notable event of the trip was what Fed Chairman Ben Bernanke planned to say but did not actually say:

Federal Reserve Chairman Ben S. Bernanke urged China to let its currency gain at a faster pace to end a "distortion'' that benefits exporters.

Bernanke in a speech at the Chinese Academy of Social Sciences edged away from his prepared remarks, which called an "undervalued'' yuan an "effective subsidy'' for exports. Using the subsidy label would have implications for China's compliance with World Trade Organization rules and could feed Congressional pressure to impose trade sanctions, analysts said.

Bernanke doesn’t connect the surge in China’s exports to the real depreciation of the dollar, and the real depreciation of the RMB, but I will. The RMB's link to the dollar is a bigger political issue in the US than in Europe, but China’s exports to Europe have actually grown faster than its exports to the US over the past few years....

The RMB’s de facto link to the dollar has become a major distortion in the world economy. But I do worry that the issue has now been framed in a way that makes any appreciation of the RMB – a move that many think is in China’s own interest – appear to be a concession to the US.

I also worry though that China’s emphasis on its own sovereign rights -- including its own sovereign right to peg to the dollar and subsidize the US Treasury -- misses a key point. China is no longer a small part of the world economy. China, inc single-handedly may finance about 1/3 of the US current account deficit in 2007. Its domestic policy choices increasingly impact the world. China's policy choices are a growing concern of the rest of the world.

Right now, China is worried about too much growth and an overheated economy, not too little growth. A stronger RMB could substitute for administrative controls on investment. Rather than leading to slower growth, a stronger RMB might help to rebalance the basis of Chinese growth.

In the past few months, China has used a host of measures -- limits on bank lending, delays approving big projects and the like -- to slow investment. With strong exports and a rapidly rising trade surplus contributing strongly to China's current growth (see Nick Lardy), China in sense has been forced to take steps to curb domestic demand growth to keep China's economy from overheating....

If exports weren't growing so fast -- the World Bank expects net exports will contribute 3 percentage points to q3 growth in China -- China's macroeconomic policy high command would have more scope to let the components of domestic demand rise more rapidly. There would be less of a (macroeconomic) case for restraining investment. China could let the banks lend out some of the spare cash, rather than forcing them to lend those funds to the central bank. And the government could take a host of policy steps to stimulate consumption without worrying about overheating.

So, the question is, why isn't China pursuing this course of action? A few possibilities:

1) Interest group politics exist in China, and the export lobby is very powerful. That's the implicit argument in this Steven Weisman piece for the NYT:

American officials and specialists on China have said that Wu Yi, a vice prime minister and the country’s highest-ranking female official, might not have the inclination, or the influence, to challenge the party apparatus that is tied to the sprawling state-owned export industries....

“I’m not expecting any miracles,” said Yu Yongding, director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences in Beijing.

“This visit by Mr. Paulson will have some influence on Chinese political leaders, but China always prefers gradualism,” he said....

“I have been arguing for a change in economic policy for years, but my voice is quite lonely,” Mr. Yu said. He added that however understanding Ms. Wu might be, she and the Communist Party are largely beholden to China’s export sector, which accounts for more than a third of the country’s economy (emphasis added).

2) The Chinese leadership is worried about domestic political stability: Howard French's story about Shenzen in today's New York Times

Shenzhen owed its success to a simple formula of cheap land, eager, compliant labor and lax environmental rules that attracted legions of foreign investors who built export-based manufacturing industries. With 7 million migrant workers in an overall population of about 12 million — compared with Shanghai’s 2 to 3 million migrants out of a population of 18 million — Shenzhen became the literal and symbolic heart of the Chinese economic miracle.

Now, to other cities in China, Shenzhen has begun to look less like a model than an ominous warning of the limitations of a growth-above-all approach.

While grueling labor conditions exist in many parts of China, Shenzhen’s gigantic plants, employing as many as 200,000 workers each, have established a particular reputation for harshness among workers and labor advocates. Monthly turnover rates of 10 percent or more are not uncommon, labor groups say.

The tough working conditions, in turn, have helped spawn one of the most important labor developments in China in recent years: large-scale wildcat strikes and smaller job actions for better hours and wages....

Increasingly short of workers, factories recently have increased assembly-line wages by as much as 20 percent. But even so, critics say, Shenzhen’s boom has spread little wealth.

While the city is dependent on migrant labor to keep its factories running, onerous residency rules discourage migrants from settling here permanently and make it difficult for them to obtain public services from education to health care.

“The government has evaded its responsibilities toward migrant workers,” Jin Cheng, a member of an influential local civic forum, Interhoo, said bluntly.

The resulting rootlessness has fed a wave of crime of a sort hardly ever seen elsewhere in China. Gunfights, kidnappings and gang warfare are rife, and crime rates are skyrocketing.

Although the city does not publish crime data, the Southern Metropolitan News, one of the most reputable Chinese newspapers, reported that there were 18,000 robberies in 2004 in Baoan, one of six districts in Shenzhen. By comparison, in Shanghai, a city of around 18 million, there were only 2,182 reported robberies for all of 2004, according to figures compiled by the city....

“Shenzhen may seem prosperous,” a worker said, sitting in his bunk in a steamy dormitory, “but it’s a desperate place.”

While the story makes it clear that China's government and regions have rejected Shenzen model going forward, the problem is that it's still the policy in Shenzen and other coastal megalopolises. Shifting away from this paradigm will not be easy, and China's administrative controls are of limited use. If crime and labor unrest are a problem with 10% growth, what happens if growth slows down?

It would be a grand irony if Marx's prediction of a proletariat uprising were to take place in China.

3) China views the world through a relative gains lens. This is what realists have been claiming for some time. The problem with this argument is that China's growth is too export-dependent -- a realist would be much more comfortable with domestic-led growth. Still, it's a possibility to consider.

Readers are encouraged to offer their answers to the China puzzle.

From Jane Galt:

It's the holiday season in New York, which means the festive sight of twenty-somethings decorating th